Kraken parent Payward’s adjusted profit rose to $60 million in the third quarter, up from $23 million in the second quarter, but remained 67% below the same period last year. The company said customers added assets to the platform in every month of the past 12 months, while falling crypto prices reduced the dollar value of those holdings. The results come as Nasdaq has agreed to invest $100 million in Payward at a reported valuation of $21 billion, putting the exchange operator’s operating performance under scrutiny ahead of a potential listing.
Customer holdings grew as dollar values fell
Payward released its third-quarter results on November 13. Average assets on the platform fell 21% year over year to $43 billion. Valued at constant asset prices, however, customer holdings increased 29% to $71 billion. The difference reflects the effect of lower crypto prices on the dollar value of customers’ portfolios, rather than a decline in the quantity of assets they held.
The number of funded accounts rose 37% from a year earlier to 7.1 million. Payward said customers had added assets to the platform every month for a full year. Account growth and customer assets are important measures of an exchange’s operating base, while price movements can also affect the dollar value of related revenue.
TPM replaces adjusted revenue as a key measure
In its latest results, Payward made a change to its core operating metrics, using Total Platform Margin (TPM) in place of adjusted revenue as its primary measure. TPM deducts transaction costs and staking rewards paid to customers. Third-quarter TPM was $487 million, up 12% from the second quarter but down 12% year over year.
Profit from customer-held assets reached $128 million, a 26% increase from the previous quarter. The figure reflects the contribution of customer assets beyond trading activity. But TPM’s annual decline shows why the quarterly rebound in adjusted profit alone does not capture the full-year trend.
Spot trading share increased year over year
Payward said its share of spot trading rose to 6.5% of industry volume in September, compared with 3.3% a year earlier. Total platform trading volume also increased 22% from the second quarter. Those gains accompanied the quarter-on-quarter rise in adjusted profit, even as average platform assets and TPM remained below year-earlier levels.
The third-quarter picture is therefore mixed: adjusted profit reached $60 million, funded accounts grew and Payward gained spot-market share, while TPM fell 12% year over year and average platform assets, measured in dollars, declined 21%. Following Nasdaq’s agreement to invest $100 million at a reported $21 billion valuation, the figures offer different measures of Payward’s scale and profitability.